Xiaomi Overtakes Samsung in China Smartphone Market

Xiaomi Chairman Lei Jun speaks during a product launch on May 15, 2014, in Beijing, China.

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China’s “Little Rice” has gotten big.

Xiaomi, the Chinese smartphone maker with the diminutive name, became the leading smartphone vendor in China in the second quarter, with its shipments exceeding Samsung’s for the first time, according to figures from market research firm Canalys.

Xiaomi led China’s second-quarter smartphone shipment rankings with 14% market share, followed by Samsung, Lenovo and Yulong each with 12%. It’s quite a jump from the first quarter, when Xiaomi’s 10.7% market share trailed Samsung’s 18.3% and Lenovo’s 11%. And an even bigger leap from a year ago, when Xiaomi only held 5%.

Canalys Shanghai-based analyst Jingwen Wang said in a telephone interview that the popularity of devices in Xiaomi’s budget Redmi series – including the Redmi, Redmi 1S and Redmi Note – helped account for the second-quarter boost.

“The aggressive pricing points for top-notch products is an important reason that led to its success,” she said. “Both its Mi (flagship) series products and Redmi series products are price-competitive devices and feature top-notch chipsets, displays and cameras.”

Xiaomi’s devices typically sell for more than $100, while Samsung’s high-end Galaxy smartphones typically cost more than $500.

Xiaomi’s operation of its own e-commerce website, successful marketing efforts and software development have also helped it stand out among a wide field of low-cost phone makers in China, she said.

“The installed base of its own interface MIUI, which has a lot of localized improvements, is more than 50 million in the world,” Wang said.

Xiaomi wasn’t immediately available for comment. Samsung declined to comment.

Xiaomi is quite different from most other major smartphone makers. For one thing, it’s privately-owned by founder Lei Jun, executives and some outside investors. The company also sells its phones close to the manufacturing cost, making profit through services such as mobile applications.

The company has been criticized at times for its stylistic borrowings from Apple, Samsung and other rivals. Lei’s product releases are also reminiscent of those of Apple co-founder Steve Jobs, with both wearing dark shirts, among other similarities. Lei told The Wall Street Journal in an interview last fall that he did not want to be Jobs, only to be innovative like him

Update: This post has been updated to reflect Samsung declining to comment.